Topic 7 IBT

tariff

is a tax or duty a government charges on imported

(and sometimes exported) goods, used to raise revenue and

to make foreign products more expensive relative to

domestic ones.

tariff

They raise the landed price of imports,

reducing demand for foreign goods and protecting domestic

producers

ad valorem

specific

compound

tariff-rate qoutas

common types of tariff

ad valorem tariff

a percentage of the good’s value (for example, 10% of invoice

price).

specific tariff

a fixed amount per physical unit (for example, P10 per kilogram).

compound tariff

a combination of ad valorem and specific components.

Tariff-rate Quotas

a low tariff up to a quantity limit, and a higher tariff beyond that

limit

qoutas

is a government-imposed trade

restriction that sets a physical limit or

monetary value on the quantity of a good that

can be imported or exported during a specific

timeframe

business application

political use

different type of qoutas

Business Application of qoutas

can refer to a sales target that a company wants a salesperson or sales team to achieve for a specific period. Sales quotas are often monthly, quarterly, and yearly. Management can also set sales quotas by region or business unit.

Political Use of Quotas

To have an adequate representation of

women and marginalized persons in political offices, governments

may establish quotas.

embargoes

is a government-imposed restriction that blocks

trade and commerce with specific countries to

apply economic pressure and influence policies

embargoes

faced criticism for

disproportionately affecting the civilian

population rather than the regimes they target